Home Banking Regional Economics and Market Strategy Monthly (Friday, February 17, 2017)

Regional Economics and Market Strategy Monthly (Friday, February 17, 2017)

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Risk-on mood supports regional assets in early 2017

REGIONAL MACROECONOMIC & MARKET DEVELOPMENTS & OUTLOOK

  • Q4-2016 flash GDP estimates confirm that the economies of the region are in good shape
  • Private consumption in the driver’s seat on improved sentiment, rising real wages, firmer labor markets and low inflation
  • A more challenging macro outlook in 2017 for the region: Limited room for further monetary and fiscal stimulus
  • Emerging market stocks as well as external sovereign and corporate debt have broadly extended last year’s gain
  • The positive tone spread over to regional assets
  • Most EM currencies firmed; but, in the CESEE space have been little changed, with country-specific factors remaining largely at play
  • Risks this year are particularly elevated due to a cramped political events calendar in Europe, uncertainty over new US administration’s policies, ECB and Fed monetary policies to remain in the forefront

COUNTRY FOCUS

  • Bulgaria: Strong finish for the economy in the past year
  • Cyprus: Banking sector deposits increase for the first time since 2013
  • Romania: Fiscal risks on the rise
  • Serbia: Real GDP growth to accelerate further in 2017

Emerging market equities rally in tandem with improving risk sentiment

 

 

 

 

 

 

 

 

 

REGIONAL MONTHLY_JAN_FEB2017

 

 

 

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